AMENDMENT NO. 1
FORM 10-KSB/A
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Mark One
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
- --- EXCHANGE OF 1934
FOR THE FISCAL YEAR ENDED: December 31, 1998
OR
- --- TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO N/A
--- ---
COMMISSION FILE NUMBER: 33-03328-D
COFITRAS ENTERTAINMENT, INC.
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(EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)
NEVADA 87-0542172
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STATE OF INCORPORATION (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
7829 South 3500 East
SALT LAKE CITY, UT 84121
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code: (801) 944-4452
Attorney for Registrant - Julian D. Jensen: (801) 531-6600
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act: NONE
Indicate by check mark whether the Registration (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to files such reports), and (2) has been subject to such
filing requirements for the past 90 days. (1) X YES as to filing; (2) X Yes as
to requirement. --- ---
As of December 31, 1998, and extended to the filing date of this Report, the
aggregate value of the voting stock held by non-affiliates of the Registrant,
computed by reference to the average of the bid and ask price on such date was
$0.00 as the Registrant has no current trading market.
As of December 31, 1998, and currently, the Registrant has outstanding
approximately 8,984,025 shares of common stock ($.001 par value).
An index of the documents incorporated herein by reference and/or annexed as
exhibits to the signed originals of this report appears on page 14.
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BASIS AND REASON FOR AMENDMENT
Management discloses that it is filing this 10-KSB, amended, for the
period ending December 31, 1998, because the previous narrative description and
accounting information may not have sufficiently described the receipt and
distribution of the $30,000 capital investment made by the new management group
or current liabilities based upon subsequent events.
Management has made, due to subsequent events, certain minor
adjustments to the Financial Statements primarily indicating:
(i) that $27,137.00 of the $30,000 of new capital was paid as a
termination to the prior CEO;
(ii) that $2,863 of such $30,000 has been paid towards other debts
and obligations of the Company. As of December 31, 1998, the
Company had total current liabilities of $8,466 instead of the
$1,639 previously reported. Other than the foregoing
accounting matters, the Company knows of no other amendment or
changes from the previously filed 10-KSB.
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TABLE OF CONTENTS TO ANNUAL REPORT
ON FORM 10-KSB
YEAR ENDED DECEMBER 31, 1998
PART I
Item 1. Description of Business...............................................3
Item 2. Description of Property...............................................6
Item 3. Legal Proceedings.....................................................6
Item 4. Submission of matters to a Vote of Security Holders...................6
PART II
Item 5. Market for Registrant's Common Equity & Related Stockholder Matters...6
Item 6. Management's Discussion & Analysis of Financial Condition &
Results of Operations.................................................7
Item 7. Financial Statements..................................................9
Item 8. Changes in and Disagreements with Accountants on Accounting &
Financial Disclosure.................................................10
PART III
Item 9. Directors & Executive Officers, Promoters & Control Persons,
Compliance with Section 16 (a) of the Exchange Act...................10
Item 10. Executive Compensation...............................................11
Item 11. Security Ownership of Certain Beneficial Owners & Management.........12
Item 12. Certain Relationships & Related Transactions.........................12
Item 13. Exhibits & Reports on Form 8-K.......................................14
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PART I.
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ITEM 1. DESCRIPTION OF BUSINESS
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A. THE REGISTRANT
Historical Data
Cofitras Entertainment, Inc. (the "Company or "Registrant") was
incorporated on January 26, 1986 as Vantage, Inc., a Nevada corporation. In
1995, the Company changed its name from Vantage, Inc. to Cofitras Entertainment,
Inc.
In February 1987, the Company closed an initial public offering under
the then Rule S-18 Registration format which generated gross proceeds of
$175,650. It appears from historical records that the Company was intended as
what is sometimes known as a "Blind Pool" offering. That is, management had
broad discretion to enter into initially undesignated business activities and
employ the proceeds of the offering for those purposes without further
shareholder approval.
In 1988, the Company appears to have entered a "Reverse Acquisition"
with a stock brokerage firm known as StonePointe Financial Services, but which
acquisition was fully rescinded by 1989.
In March 1990, the Company entered into a purchase agreement under
which the Company acquired a United States patent dealing with a roof mount for
a disk antenna, a patent filed for an antilightning direct burial satellite
cable, and certain contracts relating to the patent in exchange for shares of
restricted voting common stock which represented a controlling interest in the
Company. In December 1990, the Company entered into an exclusive license
agreement with a wire manufacturer to manufacture and sell the cable.
Thereafter, Company management determined that it would seek other business
opportunities due to the lack of sales of its satellite business. No material
revenues have been received by the Company from the cable T.V. related
technology and the Company now regards the technology as obsolete and of no
further value.
In September 1992, shares of the Company's outstanding common stock
were sold pursuant to an Agreement of Purchase and Sale of Common Stock. The
sale of the shares resulted in a change in the control of the Company.
The acquiring shareholders transferred various media and entertainment
production rights for the majority share acquisition. These media license rights
expired in 1993 and the Company has continued after that date without any
material assets or business purposes.
In November 1992, the Company's Board of Directors, as part of the
foregoing acquisition, declared a 1 for 5 reverse stock split of its outstanding
common stock (no other Company securities were outstanding on the date of the
split). All references to shares outstanding herein have been adjusted to
reflect the effect of this reverse split, as well as the subsequent reverse
split described below, on a retroactive bases.
Since 1993, the Company has essentially existed as an inactive
reporting company without any material assets or business activities. This type
of company is commonly referred to as a "public shell" corporation. It should
also be noted that for much of the period subsequent to 1993 to the present,
management has consisted of a single officer/director. The most recent sole
officer/director has been Ms. Christine Green who served from the period of
approximately April, 1998 to November, 1998.
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As previously reported in a December 1998 8-K Filing, the Company
entered into an agreement for an acquisition of the majority of its outstanding
shares in November, 1998. The substance of this November 30, 1998 agreement,
which was finally closed as of March 5, 1999, can be outlined as follows:
1. The Company agreed, effective November 30, 1998, to reverse split
its shares on a sixty-to-one (60:1) ratio which essentially resulted in
approximately 984,025 shares being deemed to be issued and outstanding.
2. The Company agreed to issue 8,000,000 reverse split shares to a
group of private investors, acting though Mr. Dennis Madsen as their agent, for
payment of $30,000 to the Company (subsequently paid in substantial part to Ms.
Green) and a commitment to acquire the majority of the issued and outstanding
shares. Mr. Dennis Madsen subsequently became the Secretary/Treasurer of the
Company and his son, Damon Madsen, became the President pursuant to the majority
share acquisition.
3. The November 30, 1998 agreement also provided that within 100 days
of the agreement, the new shareholders now holding the majority shares pursuant
to the November 30, 1998 agreement would acquire from the prior principal
shareholder, Eversfield Corporation, acting through its principal agent and
attorney in fact, Christine Green, approximately 80% of the otherwise issued and
outstanding stock of the Company consisting of approximately 787,200 reverse
split shares. This secondary acquisition was completed as of March 5, 1999 as
earlier reported.
4. Ms. Christine Green agreed to conditionally resign on November 30,
1998 pending the completion of the final share acquisition in March, 1999 and
voted her majority share position, on behalf of Eversfield Corporation, for the
election of Mr. Damon Madsen as a Director, Mr. Gregory Stringham as a Director,
and Mr. Dennis Madsen as a Director. These directors, as elected, then appointed
themselves as the officers of the Company with Mr. Damon Madsen as President,
Mr. Gregory Stringham as Vice-President, and Mr. Dennis Madsen as
Secretary/Treasurer. This resignation became irrevocable pursuant to the closing
on March 5, 1999.
5. A Notice to Shareholders explaining these transactions, including
the completion of the majority share acquisition and reverse split, was mailed
to all shareholders of record on or about April 10, 1999, a copy of which is
attached to this 10-KSB filing as an Exhibit.
The net capital gained by the corporation from this transaction is a
commitment payable by Mr. Dennis Madsen to Cofitras to pay for up to $30,000 of
corporate expenses as needed. Mr. Madsen has advanced a repayment of
approximately $2,350 to date on this note for costs related to filing and other
securities matters. The note requires repayment to be made no later than
December 31, 1999. In the interim, Mr. Dennis Madsen has committed to pay funds
as required by the Company. It is anticipated, based upon representations of Mr.
Madsen, that the note will be fully paid in a timely manner. For accounting
purposes, this $30,000 obligation will be treated as additional capital to be
contributed.
New management is presently engaged in attempting to find suitable
merger/acquisition or joint venture candidates for an appropriate business
purpose for the corporation. However, no agreement in principle has been entered
as to any such merger, acquisition, or other business venture. The Company will
file the appropriate 8-K notice when, or if, such an agreement is reached in
principle.
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Business of Issuer
The Company has no current business operations. The Company's business
plan is to seek one or more potential business ventures, such as a merger or
acquisition, that, in the opinion of management, may warrant involvement by the
Company. The Company recognizes that because of its limited financial,
managerial and other resources, the type of suitable potential business ventures
which may be available to it will be extremely limited. The Company's principal
business objective will be to seek long-term growth potential in the business
venture in which it participates rather than to seek immediate, short-term
earnings. In seeking to attain the Company's business objective, it will not
restrict its search to any particular business or industry, but may participate
in business ventures of essentially any kind or nature. It is emphasized that
the business objectives discussed are extremely general and are not intended to
be restrictive upon the discretion of management.
The Company will not restrict its search for any specific kind of
firms, but may participate in a venture in its preliminary or development stage,
may participate in a business that is already in operation or in a business in
various stages of its corporate existence. It is impossible to predict, at this
stage, the status or terms of any venture in which the Company may participate,
in that the venture may need additional capital, may merely desire to have its
shares publicly traded, or may seek other perceived advantages which the Company
may offer. In some instances, the business endeavors may involve the acquisition
or merger with a corporation which does not need substantial additional cash,
but which desires to establish a public trading market for its common stock.
There is no assurance that the Company will be able to successfully
identify and negotiate a suitable potential business venture.
The Company has no employees. The Company presently maintains its
business office at 7829 South 3500 East, Salt Lake City, Utah 84121, which is
the home-business office of its Secretary/Treasurer. Mr. Madsen has not charged
any fee for this accommodation..
ITEM 2. DESCRIPTION OF PROPERTIES
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The Company has no significant assets, property, or operating capital.
ITEM 3. LEGAL PROCEEDINGS
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The Company is not a party to, nor are its properties the subject of,
any pending legal proceedings and no such proceedings are known to the Company
to be threatened or contemplated by or against it.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
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No matter was submitted to a vote of the security holders during the
4th quarter of the fiscal year covered by this report. A notice of the completed
reorganization, as described above, was mailed to all shareholders of record.
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PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY & RELATED STOCKHOLDER MATTERS
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Market Information
To the knowledge of current management, their is no public trading
market for the Company's stock.
Holders
At December 31, 1998, there were approximately 215 holders of record of
the Company's common stock. As of December 31, 1998, there were approximately
8,984,025 shares outstanding.
Dividends
The Company has not declared any cash dividends within the past two
years on its common stock. The Company does not anticipate or contemplate paying
dividends in the foreseeable future. It is the present intention of management
to utilize available funds, if any, for the development of the Company's
business.
ITEM 6. MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION & RESULTS OF
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OPERATIONS
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As will be noted from the financial statements, the Company does not
have any present revenues, income, or material assets. It does have a modest
amount of accrued debt and liability, together with a commitment from its
Secretary/Treasurer to contribute up to an additional $30,000 in capital as
necessary. No detailed analysis of operations can be completed until or unless
the Company is successful in obtaining a potential merger, acquisition, or other
business relationship. At that time, the Company would intend to file the
appropriate 8-K filing, which would contain a description of intended business
activities and any pro forma consolidated financial statements pertaining to a
potential merger or acquisition candidate.
It should also be noted that unless the Company is successful in
obtaining some form of business reorganization, it is not likely that it can
continue indefinitely as an inactive public shell corporation.
The following discussion and analysis provides information which
management believes is relevant to an assessment and understanding of the
Company's consolidated results of operations and financial condition. The
discussion should be read in conjunction with the consolidated financial
statements and notes thereto.
Plan of Operation
The Company has no business operations, and very limited assets or
capital resources. The Company's business plan is to seek one or more potential
business ventures that, in the opinion of management, may warrant involvement by
the Company. The Company recognizes that because of its limited financial,
managerial and other resources, the type of suitable potential business ventures
which may be available to it will be extremely limited. The Company's principal
business objective will be to seek long-term growth potential in the business
venture in which it participates rather than to seek immediate, short-term
earnings. In seeking to attain the Company's business objective, it will not
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restrict its search to any particular business or industry, but may participate
in business ventures of essentially any kind or nature. It is emphasized that
the business objectives discussed are extremely general and are not intended to
be restrictive upon the discretion of management.
The Company will not restrict its search for any specific kind of
firms, but may participate in a venture in its preliminary or development stage,
may participate in a business that is already in operation or in a business in
various stages of its corporate existence. It is impossible to predict at this
stage the status of any venture in which the Company may participate, in that
the venture may need additional capital, may merely desire to have its shares
publicly traded, or may seek other perceived advantages which the Company may
offer. In some instances, the business endeavors may involve the acquisition of
or merger with a corporation which does not need substantial additional cash but
which desires to establish a public trading market for its common stock.
The Company does not have sufficient funding to meet its cash needs.
The officers have expressed their intent to borrow funds, to the extent
possible, to fund the costs of operating the Company until a suitable business
venture can be completed. Management does not anticipate raising capital funds
during the next twelve months. There is no assurance that the Company will be
able to successfully identify and/or negotiate a suitable potential business
venture.
The Board has designated Mr. Dennis Madsen to act as a finding agent
for the Company related to its intention to seek out various merger or
acquisition candidates. Mr. Madsen has been given authority to negotiate
preliminary agreements of merger or acquisition or other business ventures,
subject to Board approval.
The Company has experienced net losses during the development stage
(April 1989 to present) and has had no significant revenues during such period.
During the past four fiscal years the Company has had no business operations. In
light of these circumstances, the ability of the Company to continue as a going
concern is significantly in doubt. The attached financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
Forward-Looking Statements
When used in this Form 10-K or other filings by the Company with the
Securities and Exchange Commission, in the Company's press releases or other
public or shareholder communications, or in oral statements made with the
approval of an authorized officer of the Company's executive officers, forward
sounding words or phrases such as "would be", "will allow", "intends to", "will
likely result", "are expected to", "will continue", "is anticipated",
"estimate", "project", or similar expressions are intended to identify
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995.
The Company cautions readers not to place undue reliance on any
forward-looking statements, which speak only as of the date made, and advises
readers that forward-looking statements involve various risks and uncertainties
and are only reasonable projections of management based upon limited current
information. The Company does not undertake, and specifically disclaims, any
obligation to update any forward-looking statements to reflect occurrences or
unanticipated events or circumstances after the date of such statement.
Year 2000 Compliance
At present, the Company only has access to a desktop PC to maintain its
rudimentary accounting and check ledger entries. The Company has had this
computer reviewed and has determined that it and its software programs are
compatible with the change-over in the year 2000 and should not cause a problem.
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The year 2000 (hereafter Y2K) computer compliance problem is primarily
based upon the fact that many computers and computer software programs may not
be compatible with the year change from 1999 to the year 2000. As a result, many
computer programs may fail or lose data as the millennium approaches. The
Company has focused its concern on this Y2K problem in three general areas.
First, computer programs and related software owned or used by the Company.
Secondly, collateral equipment such as potential communication systems and other
equipment that relies upon computer based components. Thirdly, Y2K problems
which may occur within the industry in which the Company may become involved.
As noted above, the Company has only access and use of a small desktop
PC which is Y2K compatible and therefore, does not believe any further review or
remedial work required to be Y2K compliant as to its in-house computer systems.
The Company is adopting a policy that any computer system purchased will have to
be warranted as Y2K compliant to be acquired by the Company.
Since the Company has no collateral equipment which is reliant upon
computer based systems, it also has determined that it does not have any problem
in the second category, but has adopted a policy that any collateral equipment,
such as communication systems, that will have computer components will have to
have a warranty or certification that they are Y2K compliant to be purchased or
leased by the Company in the event of reorganization.
The Company does not know which industry, if any, it may participate in
any potential reorganizations. As part of its due diligence in any acquisition
or merger proposal, it will require, as a necessary term and condition, that all
computer systems sought to be acquired or in which the Company will participate
through any type of reorganization must be certified as Y2K compliant. Further,
the Company will consider as a significant element in any reorganization efforts
what Y2K problems may exist in the industry in which the Company will
participate and whether sufficient remedial steps have been taken to ensure
against dramatic failures within that industry.
The Company believes that the foregoing constitutes all reasonable
efforts which may be taken and have been taken for Y2K compliance. Should the
Company acquire significant computer related programs or equipment as part of
any future merger or acquisition, it will appoint an officer having
responsibility for Y2K compliance as part of the Company's due diligence
efforts. To date, the Company has not expended any measurable resources on Y2K
compliance.
ITEM 7. FINANCIAL STATEMENTS
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See attached financial statements.
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ITEM 8. CHANGES IN & DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING & FINANCIAL
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DISCLOSURE
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The Company is not aware, and has not been advised by its auditors, of
any disagreement on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure. The Company does note, as
of March, 1999 an 8-K filing in which it announced the change of auditors from
Jones, Jensen & Co. of Salt Lake City, to Hansen, Barnett & Maxwell of Salt Lake
City. A copy of this 8-K filing is attached as an Exhibit. Also in that 8-K, the
Company noted in prior filings that its authorized capital had been misstated at
300,000,000 shares and will be corrected to 75,000,000 in all subsequent
filings.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS & CONTROL PERSONS, COMPLIANCE
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WITH SECTION 16(a) OF THE EXCHANGE ACT
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Identify Directors and Executive Officers
Set forth below is certain information concerning each of the directors
and executive officers of the Company as of December 31, 1998:
With
Company
Name Age Position Since
Damon Madsen 25 Director/President 11/98
Gregory Stringham 56 Director/Vice-President 11/98
Dennis Madsen 56 Director/Secretary/Treasurer & 11/98
Chief Financial Officer
Biographical information as to current management:
DAMON MADSEN - Mr. Madsen is single and resides in Salt Lake City, Utah. Mr.
Damon Madsen is a high school graduate and works part-time at various
occupations. Mr. Madsen does not have extensive management experience, but has
served on other small development stage public companies as a director. Mr.
Madsen will serve the Company on an as needed part-time basis.
GREGORY STRINGHAM - Mr. Stringham is single and resides in Bountiful, Utah.. Mr.
Stringham is a 1969 graduate of Weber State University with a B.S. Degree in
Engineering. Mr. Stringham is currently an independent business consultant and
works for Davis County, Utah as an Engineer. He has extensive experience over
the past 20 years serving on the Board and as a part-time officer of various
small public companies, usually of a start-up variety. Mr. Stringham will serve
on an as needed part-time basis.
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DENNIS MADSEN - Mr. Dennis Madsen is single and resides in Salt Lake City, Utah.
He has made a portion of his residence available as the temporary offices for
the Company. Mr. Madsen is a 1967 graduate of the University of Utah with a BS
degree in Biology. He has been involved almost continuously, since graduation as
a business consultant and promoter to various small public companies, generally
of a start-up variety or as engaged in reorganization efforts. Mr. Madsen will
serve the Company part-time as its Secretary, Treasurer, and CFO and will act as
a special agent to pursue and negotiate proposed reorganization plans.
Identify Significant Employees
The Company has no employees, except for the officers described above.
Family Relationships
Mr. Damon Madsen, the President, is the son of Mr. Dennis Madsen, the
Secretary/Treasurer, who also acts as a special acquisition agent for the
Company.
Involvement in Certain Legal Proceedings
None of the director/officers have been involved in any material legal
proceedings which occurred within the last five years of any type as described
in Regulation S-K.
Compliance With Section 16(a) of the Exchange Act
The Company does not have a class of equity securities registered
pursuant to Section 12 of the Exchange Act. As a result, no reports are required
to be filed pursuant to Section 16(a).
ITEM 10. EXECUTIVE COMPENSATION
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During the last fiscal year, the Company's officer and director did not
receive any salary, wage or other compensation. During the current fiscal year
the Company has no present plans or means to pay compensation to its officers
and directors. It is anticipated, though not warranted, that the current
officers/directors may be paid some accrued compensation in cash or shares in
the event of a successful reorganization of the Company resulting in the
acquisition of an active business purpose.
There are presently no ongoing pension or other plans or arrangements
pursuant to which remuneration is proposed to be paid in the future to any of
the officers and directors of the Company.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS & MANAGEMENT
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The following table sets forth certain information with respect to the
beneficial ownership of the common stock of the Company as of March 31, 1999,
for: (i) each person who is known by the Company to beneficially own more than
five percent (5%) of the Company's common stock, (ii) each of the Company's
directors, (iii) each of the Company's Named Executive Officers, and (iv) all
directors and executive officers as a group. As of March 31, 1999, the Company
had 8,984,025 shares of common stock outstanding.
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Name and Address Shares Beneficially Percentage of Shares
of Beneficial Owner1 Owned Beneficially Owned2
Damon Madsen (Director/President) 2,666,667 30%
Gregory Stringham (Director/Vice-Pre 2,666,667 30%
Dennis Madsen (Director/Secretary/Tr 2,666,667 30%
1There are no outstanding options or rights to acquire shares.
2Rounded to nearest whole percentage.
ITEM 12. CERTAIN RELATIONSHIPS & RELATED TRANSACTIONS
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The President of the Company and one of three directors is the son of the
Secretary/Treasurer and director. Mr. Dennis Madsen, the Secretary/Treasurer,
acted as an informal agent for various purchasers of the Company's stock in the
November, 1998 majority share acquisition. Because of their majority share
position, the related or affiliated parties constituting current management
should retain effective control over the corporation pending any subsequent
reorganization.
ITEM 13. EXHIBITS AND REPORTS ON FROM 8-K
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Exhibits
Listed on page 14 hereof.
Reports on Form 8-K
The Company filed an 8-K Report pertaining to the current majority
share acquisition in the Company as of December, 1998. The Company has also
recently filed an 8-K in March, 1998 discussing the change in auditors and
related accounting matters.
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act,
the registrant has duly caused this report to be signed by the undersigned,
"hereunto duly authorized.
Cofitras Entertainment, Inc.
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(Registrant)
/s/ June 30, 1999
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Damon Madsen Date
President/Director
/s/ June 30, 1999
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Gregory Stringham Date
Vice-President/Director
/s/ June 30, 1999
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Dennis Madsen Date
Secretary/Treasurer/Director
Chief Financial Officer
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EXHIBIT INDEX
Exhibit No. Description of Exhibits:
A Preliminary Agreement pertaining to Majority Shareholder
Consent Previously filed December, 1998 8-K
B Majority Shareholder Consent to Majority Share Acquisition -
Previously filed as Exhibit to December, 1998 8-K.
C Board Minutes pertaining to November 1998 Majority Share
Acquisition Previously filed as an Exhibit to December, 1998
10-KSB.
D Closing Statement of March 5, 1999 pertaining to Majority
Share Acquisition - Previously filed as an Exhibit to
December, 1998 10-KSB.
E Notice to Shareholders related to Majority Share Acquisition
and Reverse Split of Stock - Previously filed as an Exhibit to
December, 1998 10-KSB.
F Consent of Independent Auditors
G Financial Data Schedule
H Financial Statements
FINANCIAL STATEMENT INDEX
Independent Auditor's Report....................................................
Balance Sheets..................................................................
Statements of Operations........................................................
Statements of Stockholders' Equity (Deficit)....................................
Statements of Cash Flows........................................................
Notes to the Financial Statements...............................................
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COFITRAS ENTERTAINMENT, INC.
(A Development Stage Enterprise)
REPORTS OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
AND
FINANCIAL STATEMENTS
December 31, 1998 and 1997
and for the Cumulative Period from April 12, 1989 (Beginning of
Development Stage) through December 31, 1998
HANSEN, BARNETT & MAXWELL
A Professional Corporation
CERTIFIED PUBLIC ACCOUNTANTS
<PAGE>
COFITRAS ENTERTAINMENT, INC.
(A Development Stage Enterprise)
TABLE OF CONTENTS
Page
Report of Hansen Barnett & Maxwell, Independent Certified
Public 1ccountants 1
Report of Jones, Jensen & Company, Independent Auditors 2
Financial Statements:
Balance Sheet - December 31, 1998 3
Statements of Operations for the Years Ended
December 31, 1998 and 1997 and for the
Cumulative Period from April 12, 1989 (Inception
of Development Stage) through4December 31, 1998 4
Statements of Stockholders' Equity for the
Cumulative Period from April 12, 1989 (Inception
of Development Stage) through December 31, 1996
and for the years ended December 31, 1995 and
1998 5
Statements of Cash Flows for the Years Ended
December 31, 1998 and 1997 and for the
Cumulative Period from April 12, 1989 (Incept6on
of Development Stage) through December 31, 1998 6
Notes to 7inancial Statements 7
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<PAGE>
HANSEN, BARNETT & MAXWELL
A Professional Corporation
CERTIFIED PUBLIC ACCOUNTANTS
(801) 532-2200
Member of AICPA Division of Firms Fax (801) 532-7944
Member of SECPS 345 East Broadway, Suite 200
Member of Summit International Associates Salt Lake City, Utah 84111-2693
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors and Stockholders
Cofitras Entertainment, Inc.
We have audited the accompanying balance sheet of Cofitras Entertainment, Inc.
(a development stage enterprise) as of December 31, 1998 and the related
statements of operations, stockholders' equity and cash flows for the year ended
December 31, 1998 and the cumulative period from April 12, 1989 (date of
inception) through December 31, 1998. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit. The financial
statements of Cofitras Entertainment, Inc. from inception through December 31,
1997, were audited by other auditors whose report, dated June 18, 1998, on those
statements included an explanatory paragraph referring to the uncertainty
whether the Company would be able to continue as a going concern. Our opinion,
in so far as it relates to the cumulative amounts for the period from inception
through December 31, 1997, is based solely on the report of the other auditors.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit and the report of the other auditors, provides a
reasonable basis for our opinion.
In our opinion, based on our audit and the report of the other auditors, the
financial statements referred to above present fairly, in all material respects,
the financial position of Cofitras Entertainment, Inc. as of December 31, 1998
and the results of its operations and its cash flows for the year then ended and
for the cumulative period from April 12, 1989 (date of inception) through
December 31, 1998 in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company's significant losses raise substantial doubt
about its ability to continue as a going concern. Management's plans regarding
those matters are also described in Note 1. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
HANSEN, BARNETT & MAXWELL
Salt Lake City, Utah
June 18, 1999
-1-
<PAGE>
Jones, Jensen
& Company
Certified Public Accountants and Consultants
INDEPENDENT AUDITORS' REPORT
Board of Directors
Cofitras Entertainment, Inc.
Salt Lake City, Utah
We have audited the accompanying statements of operations, stockholders' equity
(deficit) and cash flows of Cofitras Entertainment, Inc. (a development stage
company) for the year ended December 31, 1997 and from inception on April 12,
1989 through December 31, 1997. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe our audits provide a reasonable basis for our opinion.
In or opinion, the financial statements referred to above present fairly, in all
material respects, the result of operations and cash flows of Cofitras
Entertainment, Inc. for the year ended December 31, 1997, and from inception on
April 12, 1989 through December 31, 1997, in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company is a development stage company with no
significant operating revenues to date, which raises substantial doubt about its
ability to continue as a going concern. Management's plans in regard to these
matters are also described in Note 1. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
Jones, Jensen & Company
Salt Lake City, Utah
June 18, 1998
-2-
<PAGE>
COFITRAS ENTERTAINMENT, INC.
(A Development Stage Enterprises)
BALANCE SHEET
December 31, 1998
ASSETS
Total Assets $ --
=========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable $ 8,466
---------
Total Current Liabilities 8,466
---------
Stockholders' Deficit
Common stock - $0.001 par value; 75,000,000 shares
authorized; 8,984,025 shares issued and outstanding 8,984
Additional paid-in capital 204,256
Deficit accumulated during the development stage (221,706)
---------
Total Stockholders' Deficit (8,466)
Total Liabilities and Stockholders' Deficit $ --
=========
The accompanying notes are an integral part of these financial statements.
-3-
<PAGE>
<TABLE>
COFITRAS ENTERTAINMENT, INC.
(A Development Stage Enterprise)
STATEMENTS OF OPERATIONS
<CAPTION>
Cumulative From
April 12, 1989
For the Years (Beginning of
Ended December 31, Development Stage)
---------------------------- through
1998 1997 December 31, 1998
----------- ----------- -----------
<S> <C> <C> <C>
General and Administrative Expenses $ 28,776 $ 2,363 $ 221,706
----------- ----------- -----------
Net Loss (28,776) $ (2,363) $ (221,706)
=========== =========== ===========
Basic and Diluted Loss Per Share $ (0.02) $ (0.00) $ (0.31)
=========== =========== ===========
Weighted Average Number of
Common Shares 1,663,477 984,025 726,696
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-4-
<PAGE>
<TABLE>
COFITRAS ENTERTAINMENT, INC.
(A Development Stage Enterprise)
STATEMENTS OF STOCKHOLDERS' EQUITY
<CAPTION>
Deficit
Accumulated
Common Stock Additional During the Total
------------------------- Paid-In Development Stockholders'
Shares Amount Capital Stage Deficit
---------- ---------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Balance - April 12, 1989 $ 30,087 $ 30 $ 23,193 $ -- $ 23,223
Shares issued for patent rights,
March 19, $0.01 per share 181,733 182 818 -- 1,000
Shares issued for cash, April 1990,
$0.86 per share 30,815 31 26,469 -- 26,500
Shares issued for cash, December 1990,
$0.00 per share 167 -- 5,000 -- 5,000
Shares issued for services, December
1991, $29.94 per share 1,666 2 1,498 -- 1,500
Shares issued for cash, December
1992, $0.05 per share 666,666 666 35,363 -- 36,029
Shares issued for services, December
1995, $0.10 per share 72,891 73 7,427 -- 7,500
Additional paid-in capital for the
cumulative period April 12, 1989
through December 31, 1996 -- -- 82,488 -- 82,488
Net loss for the cumulative period April
12, 1989 through December 31, 1996 -- -- -- (190,567) (190,567)
---------- ---------- ---------- ---------- ----------
Balance - December 31, 1996 984,025 984 182,256 (190,567) (7,327)
Net loss for the year ended
December 31, 1997 -- -- -- (2,363) (2,363)
---------- ---------- ---------- ---------- ----------
Balance - December 31, 1997 984,025 984 182,256 (192,930) (9,690)
Shares issued for cash, November 30,
1998, $0.00 per share 8,000,000 8,000 22,000 -- 30,000
Net loss for the year ended
December 31, 1998 -- -- -- (28,776) (28,776)
---------- ---------- ---------- ---------- ----------
Balance - December 31, 1998 8,984,025 $ 8,984 $ 204,256 $ (221,706) $ (8,466)
========== ========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
- 5 -
<PAGE>
<TABLE>
COFITRAS ENTERTAINMENT, INC.
(A Development Stage Enterprise)
STATEMENTS OF CASH FLOWS
<CAPTION>
Cumulative From
April 12, 1989
For the Years Ended (Beginning of
December 31, Development Stage)
------------------------ through
1998 1997 December 31, 1998
--------- --------- ---------
<S> <C> <C> <C>
Cash Flows From Operating Activities
Net loss $ (28,776) $ (2,363) $(221,706)
Adjustments to reconcile net income to
net cash provided by operating activities:
Amortization -- -- 1,183
Common stock issued for services -- -- 9,000
Change in operating assets and liabilities:
Other assets -- -- 11,029
Shareholder payable -- -- (3,003)
Accounts payable (1,224) 2,363 10,969
--------- --------- ---------
Net Cash Used by Operating
Activities (30,000) -- (192,528)
--------- --------- ---------
Cash Flows From Investing Activities
Cash acquired upon reorganization
of Company -- -- 23,540
--------- --------- ---------
Net Cash Provided by
Investing Activities -- -- 23,540
--------- --------- ---------
Cash Flows From Financing Activities
Issuance of common stock for cash 30,000 -- 86,500
Additional capital contributed -- -- 82,488
--------- --------- ---------
Net Cash Provided by Financing
Activities 30,000 -- 168,988
--------- --------- ---------
Increase in Cash -- -- --
Cash at Beginning of Period -- -- --
Cash at End of Period $ -- $ -- $ --
========= ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-6-
<PAGE>
COIFTRAS ENTERTAINMENT, INC.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
NOTE 1--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization -- Cofitras Entertainment, Inc. (Company), was incorporated on
January 26, 1986 as Vantage, Inc. in the State of Nevada. On April 12, 1989, the
Company ceased operations and is currently considered a development stage
enterprise with its business purpose being seeking a suitable merger/acquisition
or joint venture candidate. In 1995, the Company changed its name from Vantage,
Inc. to Cofitras Entertainment, Inc.
Use of Estamates -- The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
Basis of Presentation -- The Company has no operations and has accumulated
losses since inception of $221,706. This situation raises substantial doubt
about its ability to continue as a going concern. The accompanying financial
statements do not include any adjustments relative to the amount and
classification of liabilities that might result from the outcome of this
uncertainty. Management is currently seeking one or more potential business
ventures through acquiring or merging with a company with viable operations.
Basic and Diluted Loss Per Common Share -- In 1998, the Company adopted
Statement of Financial Accounting Standards (SFAS) No. 128, Earnings Per Share.
Under SFAS 128, loss per common share is computed by dividing net loss available
to common stockholders by the weighted-average number of common shares
outstanding during the period. The adoption of SFAS 128 had no effect on basic
or diluted loss per common share.
NOTE 2--EQUITY TRANSACTIONS
During the year ended December 31, 1998, the Company agreed to a 1-for-60
reverse stock split. Prior to the reverse stock split, the Company had
59,041,509 shares issued and outstanding. The reverse stock split reduced the
issued and outstanding shares to 984,025. The accompanying financial statements
have been restated to conform to the reverse stock split. Following the reverse
stock split, the Company issued 8,000,000 shares of common stock for cash of
$30,000 or $0.00 per common share to officers who now have a controlling
interest in the Company. Additionally, these officers have committed to
contribute up to $30,000 to the Company as additional capital for which no
additional shares will be issued. Through April 13, 1999, an officer had
contributed $2,350 to the Company.
-7-
<PAGE>
COIFTRAS ENTERTAINMENT, INC.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
The Company used the $30,000 received from the issuance of common stock to
reduce accounts payable by $2,863 and $27,137 was paid to an officer of the
Company at the time of her termination as the President of the Company. The
payment has been accounted for as compensation expense.
NOTE 3--INCOME TAXES
The Company has paid no federal or state income taxes for any period. The tax
effect of the temporary difference that gave rise to the deferred tax asset at
December 31,1998, is as follows:
Operating loss carry forward $ 82,696
Valuation allowance (82,696)
---------
Total Deferred Tax Assets $ --
=========
In 1998 and 1997, the valuation allowance increased by $10,733 and $881,
respectively. As of December 31, 1998, the Company had net operating loss carry
forwards for federal income tax reporting purposes of $221,706 which, if unused,
will expire from 2001 through 2013. Due to the changes of ownership, the net
operating losses may be subject to limitations under Section 382 of the Internal
Revenue Code
The following is a reconciliation of the income tax computed using the federal
statutory rate to the provision for income taxes:
1998 1997
--------- ---------
Tax at federal statutory rate (34%) $ (9,784) $ (803)
State benefit, net of federal benefit (950) (78)
Change in valuation allowance 10,733 881
--------- ---------
Provision for Income Taxes $ -- $ --
========= =========
-8-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the balance
sheet as of December 31, 1998 and statements of operations for the year ended
December 31, 1998, and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 8466
<BONDS> 0
0
0
<COMMON> 8984
<OTHER-SE> (17450)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 28776
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (28776)
<INCOME-TAX> 0
<INCOME-CONTINUING> (28776)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (28776)
<EPS-BASIC> (0.02)
<EPS-DILUTED> (0.02)
</TABLE>
